FDIC censures Great Florida Bank

BY JANE BUSSEY
jbussey@MiamiHerald.com

Great Florida Bank, one of South Florida's fastest-growing banks since its 2004 debut, has joined the growing list of local banks hit with regulatory crackdowns for lax anti-money laundering procedures.

The bank, headquartered in Miami Lakes, agreed to comply with a Federal Deposit Insurance Corporation cease-and-desist order that became effective Tuesday.

''This is a common problem in our industry and our market,'' said Mehdi Ghomeshi, the bank's chief executive and president. ``Most of the financial institutions that I am aware of have the same issues and are having the same difficulties that we do.''

The FDIC order did not accuse the bank of wrongdoing, fine the institution or bar it from any activities, which would be a sign of more serious problems.

But complying with the government's order will be costly.

''This is a credential that the South Florida banks don't want to have,'' said Charles Intriago, president of Alert Global Media Co., which publishes Money Laundering Alert.

''This now marks the 17th regulatory or Justice Department action against 15 South Florida financial institutions since 2004,'' said Intriago.

The cease-and-desist order noted that the bank had operated without ``effective board of directors oversight and executive management supervision to prevent unsafe or unsound banking practices and violations of law and regulations related to the Bank Secrecy Act.''

The order also cited failure to comply with suspicious report regulations.

The FDIC is requiring the bank to enact procedures to report suspicious activity and to handle ''high-risk accounts and customers,'' cash transactions, wire transfers and travelers' check and foreign exchange services, among others.

Great Florida must tighten internal controls, implement better training to detect suspicious activities and monitor its compliance, as well as hire an independent auditor to carry out a ''look-back'' at all high-risk accounts and transactions since Jan. 1, 2005.

This costly forensic accounting review will determine whether the bank must file suspicious activities reports and currency transaction reports from the past.

The bank reported assets of $1.4 billion on Sept 30.

http://www.miami.com/mld/miamiherald/business/16136648.htm